Implications for practice Methodological reflection on Case Study 6

that the degree to which standard designs are reused in a new product in this firm, had a direct positive relation to the annual sales volume and, it is assumed, to market share. An increase of 50 per cent of sales could be achieved by reusing standard designs for 30 per cent of the components of the new product. The firm concluded from this posi- tive test result that it had sufficient operational flexibility to realize a sufficient level of strategic flexibility. It is important to note that the results of this study were based on data generated by the two simulation models and that, therefore, the credibility of the results is dependent on the quality of the input for these models as well as of the models themselves. The input to the models was provided by experts from the firm. This implies that the validity of the conclusions of this study depends on the quality of this input. Therefore, it is of great importance for this study that these experts confirmed in meetings that the simulation models and their results were realistic, in their opinion.

11.4 Case Study 7: Descriptive practice-oriented research

Building a model of best practice of company standardization 2 by Henk J. De Vries and Florens Slob

11.4.1 Introduction

Companies make use of many different kinds of standards in order to improve their business performance in terms of efficiency and quality. In the process industry chemical and petrochemical industries, bene- fits such as reduction of design and construction costs, procurement costs, training costs, and minimization of design errors and rework, have been reported Simpkins, 2001. Companies in the process indus- try prefer external standards, for example from the ISO International Organization for Standardization and API American Petroleum Institute Barthet, 2000; Qin, 2004; Thomas, 2004. However, these 240 2 This chapter is based on: Oly, M. P. and Slob, F. J. C. 1999. Benchmarking Bedrijfsnormalisatie – Een best practice voor de procesindustrie. Rotterdam: Erasmus Universiteit Rotterdam, Faculteit Bedrijfskunde, and De Vries, H.J. 2006 Best Practice in Company Standardization. International Journal for IT Standards and Standardization Research, 41, pp. 62–85. standards do not meet all their needs and, therefore, they complement these with their own standards, “company standards”. In this research project, five big Dutch chemical and petrochemical companies Akzo Nobel, DSM, Gasunie, NAM, and Shell, later joined by Dow Chemical, agreed with our suggestion that research could help them to improve their own standardization performance by describ- ing, evaluating, and comparing the standardization activities in each of these companies. The main objectives of this research project were 1 to design a “best practice” for company standardization that could be implemented in the six companies participating in the project, and by doing this 2 to contribute to the general body of knowledge of company standardization. Case Study 7 will focus on the first practice-oriented objective. This research was conducted by a research team, supported by a steering group consisting of the standardization managers of the com- panies, a senior standardization consultant of the Dutch national stan- dards body NEN, and the president of the NKN, the organization of Dutch standards users.

11.4.2 Absence of guidelines or criteria

A “best practice” is a practice that is in actual use at a place and that is deemed better than all other practices that are used or known else- where. If a practice is acknowledged as “best”, it should be fit for being transferred to those other places as well. Assessing which of the prac- tices in use is the best requires that appropriate criteria be used to evalu- ate current practices. Which criteria should be used to assess which shaping of standardization is the best? Although the number of company standards outweighs the number of other standards to a large extent, this relative importance is not reflected in the literature on standardization. The few studies of company stan- dards Susanto, 1988; Schacht, 1991; Adolphi, 1997; Hesser and Inklaar, 1997 Section 5; De Vries, 1999 Chapter 14; Rada and Craparo, 2001 are descriptive rather than prescriptive, and do not address the question of how to maximize the benefits of company standardization. Therefore, we could not apply an extant theoretical framework. The companies themselves had no criteria for good standardization practice either. Types of standards and their goals differed widely, both within and between companies. The two main types of standardization in these companies concerned their products approximately 10 per cent of the amount of standards and their installations 90 per cent. Chapter 11